When School of Health and Rehabilitation Sciences faculty member Jon Pearlman launched his bed scale technology startup Nexaware, he chose not to request an equity stake, for good reason.

Discussions about equity in his first startup, pathVu — which licensed a multi-sensor tool for evaluating sidewalk accessibility — led to a number of challenges between Pearlman and his Pitt colleagues. For instance, the conflict of interest policy at the time required them to divide 49 percent of equity among themselves and the University. There also were significant restrictions on Pearlman’s ability to continue this line of research within the University.

Because of the new conflict of interest policy that was passed in April by Faculty Assembly and Senate Council, those uncomfortable discussions no longer have to take place.

In the new version of the policy, faculty members have access to unlimited equity in a licensed startup company that draws from their research. Among other changes, researchers also can hold management or officer positions in a licensed startup company.

“The environment at Pitt fosters creativity, which is why innovations are a common output from the activities of our talented staff, students and faculty,” said Pearlman. “The updated conflict of interest policy streamlines the process for the Pitt community to launch and support startup companies without compromising on managing conflict of interests.

“I anticipate that this policy will lead to more startup companies being spun out of Pitt, and it will increase their chance of long-term success.”

These changes to the policy were spurred by Chancellor Patrick Gallagher’s arrival at the University and a desire to expand the University’s capacity for translational research, according to George Huber, vice provost for research conduct and compliance. During his interviews, Gallagher had heard about the University’s aversion to even the potential for risk, said Huber.

Shortly after Gallagher’s appointment, leaders recognized the need to revisit Pitt’s outdated conflict of interest policy. 

“We want to make sure that the application of our conflict of interest policy and procedures maximizes our ability to share, within the requirements of the law, the development and promotion of our wonderful science for the betterment of humankind,” said Huber.

Huber asked a subcommittee of the Conflict of Interest Committee — led by Craig Wilcox, research integrity officer and chair of the COI committee — to evaluate the policy and identify where changes needed to be implemented. 

The subcommittee members compared Pitt’s conflict of interest policy to the policies of 18 other universities, including Carnegie Mellon University, Harvard University and the Massachusetts Institute of Technology.

The subcommittee then drafted recommendations that were presented at open forums to members of the University community, who made suggestions. The proposed changes were shared with the Senate research committee, which provided ongoing feedback during revisions to the policy. Rob Rutenbar, senior vice chancellor for research, was instrumental in leading the final stages of approval, Huber said.

“The recently approved COI policy was the result of several rounds of comment and suggestions from the research committee and is a good example of how shared governance can lead to the adoption of policies that are acceptable to all parties concerned,” said Penelope Morel, co-chair of the Senate research committee and a faculty member in the School of Medicine.

Stephen Badylak, a faculty member in the School of Medicine, lauded the changes to the conflict of interest policy. Badylak, who has worked at Pitt since 2003, admitted his prior reluctance to pursuing financial interest in his innovations because of the complications presented by the previous version of the policy. That reluctance has changed as he recently signed a license deal for several of his innovations.

“The new conflict of interest policy implemented at the University of Pittsburgh provides the opportunity for faculty to facilitate the clinical translation of innovative technology,” said Badylak. “This is a win-win-win situation, in which faculty benefit from their intellectual productivity, the University benefits both financially and fulfills its mission of delivering discovery to the public sector, and patients benefit from cutting-edge technology.”